Over the past 10 years, India has experienced a remarkable level of government stability and policy continuity. This has had a significant impact on the country’s macroeconomic stability, with key indicators such as interest rates and inflation remaining relatively stable. As a result, the equity market has seen substantial growth, with more and more investors turning to real asset classes and investing through SIPs (Systematic Investment Plans). The number of demat accounts has also seen a dramatic increase, from 4 crore a few years ago to 14 crore today.
This stability and growth can be attributed to a number of important factors coming together. Political stability and strong policy framework have created an environment conducive to economic growth. As a result, high corporate and larger companies are performing well, and the overall infrastructure of the country is becoming more organized. India’s position in the global economy is also on the rise, with the country enjoying a sweet spot in terms of economic prospects.
However, while the market has been on a continuous upswing, it is important to remember that there may be times when corrections occur. It is essential to have patience and take a long-term view of investments. Despite these potential market corrections, there is a strong belief that the Nifty will continue to rise, possibly reaching 1 lakh at some point in the future. This belief is fueled by the understanding that the market operates in rotation, with different sectors coming into focus at different times.
In the context of the stock market, government policy plays a crucial role. When good valuations are available, it is important to be selective and consult trusted financial professionals to ensure proper diversification. Through careful and informed decision-making, one can make the most of the opportunities presented by the market.
In conclusion, the past 10 years have seen significant growth and stability in the Indian economy, driven by political stability and sound policy decisions. This has led to a thriving equity market and increased investor participation. While there may be some short-term fluctuations, the long-term outlook remains positive, and it is essential for investors to maintain a patient and informed approach.
Author can be reached at irshad@bp.sharekhan.com
